Partner Article

West Coast franchise competition halted by Government errors

First Group’s takeover of the West Coast mainline has been halted after an embarrassing mistake from the Department for Transport (DfT).

Competition for the line has been cancelled as DfT were expected to present evidence at the High Court on Wednesday, after “the discovery of significant technical flaws”.

Sir Richard Branson challenged the Government’s decision to take up First Group’s bid to take over the Virgin Rail owned franchise, as the company claimed its rival’s proposals to spend £350m were unrealistic.

DfT announced that it will not be awarding a franchise contract to run the West Coast service, and is no longer fighting the High Court battle against Virgin because of critical mistakes made within the department.

Transport Secretary, Patrick McLoughlin, said in a statement the franchise competition had been cancelled as a result of “deeply regrettable and completely unacceptable mistakes made by my department”.

Two independent reviews will investigate Government mistakes, and DfT is expected to suspend officials who are directly to blame for errors made in the procurement process.

Mr McLoughlin added: “West Coast passengers can rest assured that while we seek urgently to resolve the future arrangements the trains that run now will continue to run, with the same drivers, the same staff and timetables as planned.”

Philip Rutnam, DfT permanent secretary, commented: “The errors exposed by our investigation are deeply concerning.

“I am determined to identify exactly what went wrong and why, and to put these things right so that we never find ourselves in this position again.”

A spokesperson for Virgin Rail said: “We welcome today’s frank announcement by the Secretary of State, acknowledging the flaws in the way the InterCity West Coast competition was assessed.

The current service providers for West Coast mainline services said it would assist DfT in its review to offer customers and taxpayers a better serving franchise system.

Virgin concluded: “In the meantime, we will assist the Department for Transport in ensuring continuity of service for the millions of customers who depend on train services on the West Coast mainline.”

Darrell Matthews, regional director for the IoD North West, said: “It is shocking that such a crucially important process has gone so seriously wrong. Businesses need a stable, reliable rail network and certainty in the provision of key infrastructure. Government tendering processes must be whiter than white, or firms will be deterred from applying to take contracts on, which will harm service delivery.

“This uncertainty leaves the future of a key route for the North West in limbo and will no doubt impact our businesses.“

TUC General Secretary Designate, and chair of Action for Rail, Frances O’Grady said: “This embarrassing episode has exposed once again the inherent flaws of the current franchising system which has resulted in expensive legal challenges and a PR disaster for the government.

“It is essential that ministers learn the lessons from this debacle and look at the successful blueprint provided by the East Coast mainline which is making profits that are being reinvested back into services for passengers. It is essential that any plans to re-privatise this route are now abandoned and the West Coast mainline is also taken back into public ownership.

“Instead of encouraging unsustainable bids that are not in the interests of passengers and taxpayers the government needs to realise the value of state-run services.”

This was posted in Bdaily's Members' News section by Miranda Dobson .